2020 SHANGHAI HENLIUS BIOTECH, INC.
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SHANGHAI HENLIUS BIOTECH, INC. 上海復宏漢霖生物技術股份有限公司 (A joint stock company incorporated in the People's Republic of China with limited liability) Stock Code: 2696 Interim Report 2020 Reliable Quality Affordable Innovation
MISSION To improve patients＇lives by timely providing them with quality and affordable protein therapeutics through technical innovation and operational excellence. VISION Be the most trusted and admired biotech company providing innovative and affordable medicines for all patients.
CONTENTS Corporate Information 2 Operation Highlights 4 Management Discussion and Analysis 7 Independent Review Report 25 Interim Condensed Consolidated Statement of Profit or Loss 26 Interim Condensed Consolidated Statement of Comprehensive Income 27 Interim Condensed Consolidated Statement of Financial Position 28 Interim Condensed Consolidated Statement of Changes in Equity 29 Interim Condensed Consolidated Statement of Cash Flows 30 Notes to Interim Condensed Consolidated Financial Statements 32 General Information 46 Definitions 53
CORPORATE INFORMATION
DIRECTORS NOMINATION COMMITTEE
Qiyu Chen (陳啟宇) (Chairman)
EXECUTIVE DIRECTOR Guoping Zhao (趙國屏)
Scott Shi-Kau Liu (Chief Executive Officer) Ruilin Song (宋瑞霖)
NON-EXECUTIVE DIRECTORS REMUNERATION COMMITTEE
Qiyu Chen (陳啟宇) (Chairman) Ruilin Song (宋瑞霖) (Chairman)
Yifang Wu (吳以芳) Lik Yuen Chan (陳力元)
Xiaohui Guan (關曉暉) Yifang Wu (吳以芳)
Aimin Hui
Zihou Yan (晏子厚)1 STRATEGY COMMITTEE
Jiemin Fu (傅潔民)2 Qiyu Chen (陳啟宇) (Chairman)
Scott Shi-Kau Liu
INDEPENDENT NON-EXECUTIVE DIRECTORS Yifang Wu (吳以芳)
Tak Young So (蘇德揚) Aimin Hui
Lik Yuen Chan (陳力元) Zihou Yan (晏子厚)1
Guoping Zhao (趙國屏) Tak Young So (蘇德揚)
Ruilin Song (宋瑞霖) Ruilin Song (宋瑞霖)
Jiemin Fu (傅潔民)2
SUPERVISORS
ENVIRONMENTAL, SOCIAL AND
Rongli Feng (馮蓉麗) (Chairman) 3
Deli Kong (孔德力) GOVERNANCE COMMITTEE
Jingyi Wang (王靜怡) Lik Yuen Chan (陳力元) (Chairman)
Yong Zhou (周勇) (Chairman) 4 Tak Young So (蘇德揚)
Kun Dai (戴昆) (Chairman) 5 Ruilin Song (宋瑞霖)
Zihou Yan (晏子厚)
AUDIT COMMITTEE Scott Shi-Kau Liu
Tak Young So (蘇德揚) (Chairman)
Lik Yuen Chan (陳力元) JOINT COMPANY SECRETARIES
Xiaohui Guan (關曉暉) Xinjun Guo (郭新軍)
Ching Ching Leung (梁晶晶) (Fellow of the Hong Kong Institute of
Chartered Secretaries)
Notes:
1. Mr. Zihou Yan (晏子厚) was appointed as a non-executive Director and a member of the Strategy Committee on 19 February 2020.
2. Mr. Jiemin Fu (傅潔民) resigned as a non-executive Director and a member of the Strategy Committee on 19 February 2020.
3. Ms. Rongli Feng (馮蓉麗) was appointed as a supervisor and the chairman of the board of supervisors on 23 May 2020.
4. Mr. Yong Zhou (周勇) resigned as a supervisor and the chairman of the board of supervisors on 19 February 2020.
5. Ms. Kun Dai (戴昆) was appointed as a supervisor and the chairman of the board of supervisors on 19 February 2020. She resigned as a
supervisor and the chairman of the board of supervisors with effect from 23 May 2020.
2 Shanghai Henlius Biotech, Inc.CORPORATE INFORMATION
AUTHORISED REPRESENTATIVES AUDITOR AND REPORTING ACCOUNTANTS
Scott Shi-Kau Liu Ernst & Young
Ching Ching Leung (梁晶晶) Certified Public Accountants
22nd Floor, CITIC Tower
HEAD OFFICE AND PRINCIPAL PLACE OF 1 Tim Mei Avenue
BUSINESS IN CHINA Central
Hong Kong
9F, Innov Tower (Capitaland Building)
1801 Hongmei Road
LEGAL ADVISERS TO THE COMPANY
Xuhui District
Shanghai As to Hong Kong and U.S. laws:
PRC Freshfields Bruckhaus Deringer
55th Floor, One Island East
REGISTERED OFFICE IN CHINA Taikoo Place
Quarry Bay
Rooms 303-304, Building 7
Hong Kong
No. 1999, Zhangheng Road
China (Shanghai) Pilot Free Trade Zone
As to PRC law:
PRC
Llinks Law Offices
19/F and 16/F, One Lujiazui
PRINCIPAL PLACE OF BUSINESS IN HONG
68 Yin Cheng Road Middle
KONG Shanghai
Level 54 PRC
Hopewell Centre
183 Queen’s Road East STOCK SHORT NAME
Hong Kong HENLIUS – B
H SHARES REGISTRAR STOCK CODE
Computershare Hong Kong Investor Services Limited 2696
Shops 1712-1716, 17th Floor
Hopewell Centre COMPANY WEBSITE
183 Queen’s Road East
www.henlius.com
Wanchai
Hong Kong
COMPLIANCE ADVISER
Haitong International Capital Limited
8/F Li Po Chun Chambers
189 Des Voeux Road Central
Central
Hong Kong
Interim Report 2020 3OPERATION HIGHLIGHTS
I. FINANCIAL SUMMARY
1. The Group’s total revenue increased by approximately RMB93.4 million to RMB110.4 million for the six months ended 30
June 2020, compared to RMB17.0 million for the six months ended 30 June 2019. Such revenue was from drug sales,
research and development (“R&D”) services provided to customers, and license revenue.
2. For the six months ended 30 June 2020, the Group recognised R&D expenditure of approximately RMB756.9 million,
representing an increase of approximately RMB228.4 million as compared with approximately RMB528.5 million for the six
months ended 30 June 2019.
3. The Group’s total loss increased by RMB131.1 million to RMB448.0 million for the six months ended 30 June 2020,
compared to RMB316.9 million for the six months ended 30 June 2019, mainly due to the expansion of R&D activities.
4 Shanghai Henlius Biotech, Inc.OPERATION HIGHLIGHTS
II. INTERIM HIGHLIGHTS
PRODUCTS THAT HAVE OVERALL LAYOUT OF
BEEN COMMERCIALISED IMMUNO-ONCOLOGY DEVELOPMENT MILESTONE
AND WITH NEAR-TERM COMBINATION THERAPIES OF THE GROUP
COMMERCIAL VISIBILITY
HLX10 + chemotherapy On 30 March 2020
HLX01漢利康(Rituximab) During the Reporting Period, one Phase On 30 March 2020, the Board of the
2 clinical trial of HLX10 in combination Company has resolved to approve the
Applications for the addition of 2,000L drug with chemotherapy has completed the
substance production scale and 2,000L resolution on making an application to the
first patient dosing in mainland China, relevant regulatory authorities in the PRC
production equipment, and the addition and two Phase 3 clinical trials of HLX10
of the specification of 500mg/50ml/vial on for the allotment and issue of A Shares
in combination with chemotherapies and an application to the Shanghai Stock
the basis of the original specification of have completed the dosing for the first
100mg/10ml/vial were approved by the Exchange for the relevant matters in
patient in Turkey, whose indications cover
NMPA in April 2020; the supplemental advanced cervical cancer (CC) which failed relation to the listing of, and permission to
applications for the two new indications to respond to the first-line chemotherapy, deal in, the A Shares on the Science and
were approved by the NMPA in July 2020. first-line therapy for locally advanced Technology Innovation Board of Shanghai
or metastatic squamous non-small cell Stock Exchange. On 12 June 2020,
lung cancer (sqNSCLC), and previously the shareholders of the Company have
HLX02 (trastuzumab injection) untreated extensive-stage small cell lung resolved to approve these matters.
cancer (ES-SCLC).
The Marketing Authorisation Application
(MAA) for HLX02 trastuzumab injection On 30 March 2020
(EU trade name: Zercepac®) submitted by HLX10+HLX07
a wholly-owned subsidiary of Accord, the The Board of the Company has resolved
Group’s business partner, was accepted In July 2020, the first patient has been to approve the second stage investment
by the European Commission (EC) in July dosed in a Phase 2 clinical trial as therapy of not more than RMB720 million for the
for recurrent or metastatic head and neck Phase I project of the Songjiang Second
2020. squamous cell carcinoma (HNSCC) in Plant, which is currently under construction
The NDA for HLX02 trastuzumab injection mainland China. in Songjiang District, Shanghai. As of the
(trade name in mainland China: 漢曲優) Latest Practicable Date, the Board has
was approved by the NMPA in August approved investment of the first and second
2020. stages investment with the total amount
Xuhui Facility has received the GMP OTHER PRODUCTS of not more than RMB1,720 million for the
certification issued by the EU in respect UNDER RESEARCH Phase I project of Songjiang Second Plant.
of HLX02 trastuzumab injection (EU trade
name: Zercepac ®) drug substance (DS)
and drug product (DP) line in April 2020, HLX55 (innovative anti-c-MET mAb)
and has passed the on-site inspection
In March 2020, the first patient was
INTERNATIONALISED
conducted by Shanghai Medical Products BUSINESS COOPERATION
Administration (上海市藥品監督管理局) in dosed in a Phase 1 clinical trial of HLX55
monoclonal antibody for injection (HLX55)
respect of HLX02 trastuzumab injection for the treatment of advanced solid tumours
(trade name in mainland China: 漢曲優) refractory to standard therapy in Taiwan, In March 2020
drug substance (DS) south line and drug China.
product (DP) No. 1 line in July 2020. As of An exclusive license agreement was
the Latest Practicable Date, Xuhui Facility HLX11 (recombinant anti-HER2 domain entered into with Mabxience to grant
has completed the filing of production II humanised monoclonal antibody it an exclusive license to develop and
approval for new key equipment of four injection) commercialise products containing HLX02
2,000L bioreactors to Shanghai Medical in therapeutic use in oncology in Argentina,
Products Administration and the Group’s IND for the indications of metastatic breast Uruguay and Paraguay. According to the
overall commercial production capacity has cancer and early breast cancer has been agreement, the Company will receive
been increased to 20,000L. approved by the NMPA in January 2020, an upfront payment of USD250,000
and the first patient has been dosed in a and milestone payments not more than
Phase 1 clinical study in September 2020.
USD500,000.
HLX04 (recombinant humanised anti-
VEGF monoclonal antibody injection) HLX13 (recombinant anti-CTLA-4
fully humanised monoclonal antibody In June 2020
The Phase 3 clinical study for the treatment injection)
of metastatic colorectal cancer (mCRC) has An amendment to the license agreement
completed in August 2020, and the trial has IND for the indications of (i) unresectable or was entered into with Accord for HLX02
met the pre-defined primary endpoint. metastatic melanoma, (ii) advanced renal trastuzumab injection (EU trade name:
cell carcinoma, (iii) microsatellite instability- Zercepac ® ) on the basis of the license
The NDA for the treatment of metastatic high or mismatch repair-deficient metastatic
colorectal cancer (mCRC) and advanced, colorectal cancer and (iv) adjuvant agreement entered into by both parties
metastatic or recurrent non-small cell lung melanoma treatment has been approved for HLX02 in June 2018, which was made
cancer was accepted by the NMPA in by the NMPA in April 2020. in respect of the new specifications and
September 2020. the corresponding milestone payment
arrangement not exceeding USD3.08
HLX14 (recombinant anti-RANKL fully
million and the adjustment in the royalties
humanised monoclonal antibody
HLX03 (adalimumab injection) of HLX02 (increasing from the range of
injection)
13.5%-25% of profits generated from the
Xuhui Facility has passed the on-site IND for the indication of postmenopausal net sales as agreed in the original license
inspection conducted by Shanghai Medical osteoporosis in women with high fracture agreement to 15%-26.5%).
Products Administration in respect of risks has been approved by the NMPA in
HLX03 (adalimumab injection) drug May 2020.
substance (DS) south line and drug product
(DP) No. 1 line in September 2020. HLX56 (anti-Death Receptor 4
monoclonal antibody injection)
IND for the treatment of advanced solid
tumours refractory to standard therapy has
been approved by the Ministry of Health
Interim Report 2020 5
and Welfare of Taiwan in May 2020.OPERATION HIGHLIGHTS
III. OUR PRODUCT PIPELINE
The following table summarises our product and drug candidate pipeline as of the Latest Practicable Date:
Product
Target Indication
(Reference Drug) Pre-clinical IND Phase 1 Phase 2 Phase 3 NDA
Approved for
Commercialisation Partner
(1)
漢利康 (rituximab) CD20 Non-Hodgkin lymphoma and chronic lymphocytic leukemia
(2)
HLX02 (trastuzumab) HER2 Breast cancer and metastatic gastric cancer
Approved for launching by NMPA and EC
(3)
HLX01 (rituximab) CD20 Rheumatoid arthritis
commercial visibility
With near-term
(4)
HLX03 (adalimumab) TNF-α Psoriasis, ankylosing spondylitis and rheumatoid arthritis
Metastatic colorectal cancer and non-squamous non-small cell lung cancer
HLX04 (bevacizumab) VEGF
Wet age-related macular degeneration and diabetic retinopathy
MSI-H/dMMR solid tumours
IND approved in the United States, Taiwan China and Mainland China
Monotherapy PD-1
Chronic hepatitis B
IND approved in Taiwan China
Metastatic esophageal squamous-cell carcinomas
Squamous non-small cell lung cancer
Phase 3 studies in Mainland China and Turkey
+ Chemo PD-1 Extensive-stage small cell lung cancer
Phase 3 studies in Mainland China and Turkey
HLX10
Gastric cancer
Cervical cancer
Under clinical research
Non-squamous non-small cell lung cancer
+HLX04 PD-1+VEGF
Hepatocellular carcinoma
+HLX07 PD-1+EGFR Squamous cell carcinoma of the head and neck
HLX07 EGFR Solid tumours
IND approved in the United States, Taiwan China and Mainland China
(5)
HLX05 (cetuximab) EGFR Metastatic colorectal cancer and squamous cell carcinoma of the head and neck
HLX12 (ramucirumab) VEGFR 2 Gastric cancer, metastatic non-small cell lung cancer and metastatic colorectal cancer
HLX20 PD-L1 Solid tumours
IND approved in Australia and Mainland China
HLX22 HER2 Breast cancer and gastric cancer
(6)
HLX55 c-MET Solid tumours
IND approved in Taiwan China and Mainland China
HLX11 (pertuzumab) HER2 Breast cancer
HLX13 (ipilimumab) CTLA-4 Melanoma, renal cell carcinoma and metastatic colorectal cancer
(7)
HLX56 DR4 Solid tumours IND approved in Taiwan China
HLX14 (denosumab) RANKL Osteoporosis
HLX301 TIGIT Bispecific Solid tumours
Bispecific
HLX35 4-1BB Bispecific Solid tumours
HLX304 OX40 Bispecific Solid tumours
S1 Protein of
HLX71 COVID-19 etc. Tumour-specific target
SARS-CoV-2
S1 Protein of Angiogenesis target
HLX70 COVID-19 etc.
SARS-CoV-2 Tumour immunology target
HLX15 (daratumumab) CD38 Multiple myeloma Combination therapy
Bispecific
HLX26 LAG3 Solid tumours
Others
HLX23 CD73 Solid tumours
(1) Approved by the NMPA in February 2019,
being the first domestic biosimilar
HLX16 (evolocumab) PCSK9 Hypercholesterolemia, atherosclerotic cardiovascular disease etc.
(2) Approved for launching in the EU in July 2020 (EU
Pre-clinical
trade name: Zercepac®）；approved for launching
HLX24 CD47 Solid tumours in China in August 2020, being the first domestic
biosimilar approved in both China and Europe
HLX58 Claudin 18.2 Solid tumours (3) Considered as biologic medicine since the
reference product has not yet been approved
HLX59 CD27 Solid tumours for the relevant indication
(4) HLX03's NDA has been accepted by the NMPA
HLX51 OX40 Solid tumours (5) Commercialisation rights in China have been
granted to Shanghai Jingze Biotech Co., Ltd
HLX52 TIM-3 Solid tumours
(6) Commercialisation rights in China and certain
countries in Southeast, Central and South Asia
HLX53 TIGIT Solid tumours were obtained
(7) Commercialisation rights in China were obtained
HLX63 GPC3 Solid tumours
Potential first-in-class
HLX60 GARP Solid tumours
Core products
6 Shanghai Henlius Biotech, Inc.MANAGEMENT DISCUSSION AND ANALYSIS
I. BUSINESS REVIEW FOR THE FIRST HALF OF THE YEAR
Adhering to our vision of “be the most trusted and admired innovative biotech company in the world by focusing on providing
quality and affordable medicines for all patients”, and benefitting from our efficient biopharmaceutical industry-wide platform that
integrates R&D, production and commercialisation into a whole, outstanding global regulatory registration and clinical operational
capability, comprehensive quality management system as well as strong commercial operational capability, the Group has
gradually made significant progress on product R&D and commercialisation during the Reporting Period.
(I) PROMOTING THE SUSTAINABLE AND STEADILY GROWING PRODUCT PIPELINE
Based on the main product development strategy of “combining imitation and innovation”, the Group took the lead in
launching the first domestic biosimilar, HLX01 (漢利康), and the first domestic biosimilar, HLX02 trastuzumab injection (trade
name in mainland China: 漢曲優; EU trade name: Zercepac®), approved in China and Europe, and gradually developed
innovative mAb products, combining self-developed anti-PD-1 and PD-L1 mAb, being the first to launch combined
immunotherapy in China, and prospectively laid out a comprehensive pipeline integrating innovative mAb and tumour
combination immunotherapy into a whole. As of the Latest Practicable Date, 2 products have been successfully marketed in
mainland China, 1 product’s MAA has obtained approval in the EU, 2 products’ NDA in mainland China has been accepted,
18 products and 2 mAb combination therapies have been adopted worldwide, which obtained over 30 clinical trial approvals,
and carried out about 20 clinical trials on 10 products and 8 combination therapies in many countries and regions around
the world, such as mainland China, Taiwan, China, Australia, Poland, Ukraine, the Philippines and Turkey.
The NDA for the first mAb biosimilar HLX01 (漢利康) self-developed by the Group was approved by the NMPA in February
2019, becoming the first case according to the “The Guiding Principles for Biosimilar” approved for marketed mAb, and has
achieved commercialisation in late May 2019. In the first half of 2020, primarily through the cooperation agreement with
Fosun Pharmaceutical Industrial Development, the Group achieved a total sales revenue of HLX01 (漢利康) of RMB95.8
million, and has improved the accessibility of drugs for domestic patients with haematological disease such as lymphoma.
In April 2020, HLX01 (漢利康) has received approvals from the NMPA for the applications including the addition of 2,000L
drug substance production scale and 2,000L production equipment. In the same month, HLX01 (漢利康) was approved
to add 500mg/50ml/vial to the original specification of 100mg/10ml/vial. In May 2020, supplemental applications for two
new indications of HLX01 (漢利康) were accepted by the NMPA and approved in July 2020. Since then, on top of the use
of HLX01 (漢利康) for the original approved for non-Hodgkin lymphoma indications, two new indications were added: (1)
monotherapy maintenance therapy after complete or partial response under rituximab in combination with chemotherapy
for patients with initially-treated follicular lymphoma, and (2) fludarabine and cyclophosphamide (FC) combination therapy
for patients with previously-untreated or relapsed/refractory chronic lymphocytic leukaemia (CLL), which covers all the
indications of the original rituximab in mainland China. Increased production scale and production equipment, as well as
new specifications and indications, will provide a strong guarantee of HLX01 (漢利康) production capacity, benefit a wider
range of patients, and realise drug usages with more affordable price via combinations among different scales. In order
to benefit a wider patient population, the Group adopted a differentiated development strategy for HLX01 (漢利康), and
concurrently carried out the clinical research of the original drug on rheumatoid arthritis indications that have not yet been
approved in China. As of the time being, the enrollment of patients for Phase 3 clinical trial for this indication has been
completed.
The Group’s other core products also achieved significant results during the Reporting Period. In May 2020, the MAA for
HLX02 trastuzumab injection (EU trade name: Zercepac®) submitted by a wholly-owned subsidiary of Accord, a business
partner of the Group, for the treatment of HER2-positive early-stage breast cancer, HER2-positive metastatic breast cancer
and untreated HER2-positive metastatic adenocarcinoma of the stomach or gastroesophageal junction received a positive
opinion and recommended approval for MAA from the CHMP of the EMA. In July 2020, the above mentioned MAA for
HLX02 trastuzumab injection (EU trade name: Zercepac®) was duly approved by the EC, making HLX02 (trastuzumab
injection) the first biosimilar made by Chinese institution which has been approved for launching in the EU. In August 2020,
the NDA for HLX02 trastuzumab injection (trade name in mainland China: 漢曲優) was approved by the NMPA. HLX02
trastuzumab injection (trade name in mainland China: 漢曲優) was formally approved for commercialisation in mainland
China. The sale of HLX02漢曲優 were commercialised, and relevant work is being carried out smoothly.
Interim Report 2020 7MANAGEMENT DISCUSSION AND ANALYSIS
In April 2020, the Group received two Certificates of GMP Compliance of a Manufacturer, being the GMP Certificates, from
Chief Pharmaceutical Inspectorate, being the hygiene supervision organization in Poland. The Company’s drug substance
(DS) line and drug product (DP) line for HLX02 trastuzumab injection (EU trade name: Zercepac®) at Xuhui Facility passed
the GMP certification by the EU. In July 2020, the Group received the “Notification of the Results of the On-site Inspection
of Pharmaceutical Production Base” 《藥品生產現場檢查結果告知書》
( ) issued by Shanghai Medical Products Administration,
notifying that the drug substance (DS) south line and drug product (DP) No. 1 line for HLX02 trastuzumab injection (trade
name in mainland China: 漢曲優) at Xuhui Facility have successfully passed the on-site inspection by Shanghai Medical
Products Administration.
1. MAB BIOSIMILARS THAT ARE EXPECTED TO BE COMMERCIALISED IN THE NEAR FUTURE
The NDA for HLX03 self-developed by the Group was accepted by the NMPA in January 2019 and is currently in the
priority review process. As of the Latest Practicable Date, HLX03 for the treatment of plaque psoriasis indications
has completed the phase 3 clinical trial in mainland China, which showed that the efficacy of HLX03 for moderate to
severe plaque psoriasis is equivalent to that of the original drug, and it is similar to the original drug in terms of safety,
immunogenicity and pharmacokinetics. Meanwhile, Xuhui Facility has passed the on-site inspection conducted by
Shanghai Medical Products Administration in respect of HLX03 (adalimumab injection) drug substance (DS) south
line and drug product (DP) No. 1 line. As of the Latest Practicable Date, the Phase 3 clinical study of the Avastin®
biosimilar HLX04 (recombinant humanised anti-VEGF monoclonal antibody injection) developed by the Group for
the treatment of metastatic colorectal cancer (mCRC) has completed and the trial has met the pre-defined primary
endpoint. The NDA for its treatment of metastatic colorectal cancer (mCRC) and advanced, metastatic or recurrent
non-small cell lung cancer was accepted by the NMPA.
2. CONTINUOUS AND EFFICIENT ADVANCEMENT ON CLINICAL RESEARCH PRODUCTS
As of the Latest Practicable Date, the Group has established a highly efficient and experienced global clinical
development team to actively promote the clinical research of multiple candidate drugs in multiple locations around
the world, and achieved promising progress. HLX10 (PD-1) is the core innovative mAb in the Group’s product
pipeline. As of today, HLX10 (PD-1) has been successively approved for clinical trials in the United States, Taiwan,
China and mainland China. While actively promoting the clinical development of HLX10 (PD-1), the Group is also
actively implementing the differentiated strategy of “Global + Combo”. With HLX10 (PD-1) as the core, and combining
with other pharmaceutical products, clinical trials are being conducted simultaneously in multiple countries and
regions worldwide. As of the Latest Practicable Date, “HLX10 + chemotherapy” is used to treat locally advanced/
metastatic esophageal squamous cell carcinoma, locally advanced or metastatic squamous non-small cell lung
cancer, previously untreated extensive-stage small cell lung cancer, neoadjuvant/adjuvant treatment of gastric
cancer, and advanced cervical cancer that five phase 2/3 clinical trials have all completed the first-in-patient dosing in
mainland China. The “HLX10 + HLX04” Phase 2 clinical trial for the treatment of advanced hepatocellular carcinoma
and the Phase 3 clinical trial for the treatment of non-squamous non-small cell lung cancer were both completed in
mainland China. In March 2020, the first patient dosing in mainland China was completed in a Phase 2 clinical trial
of HLX10(PD-1) in combination with albumin-bound paclitaxel for the treatment of advanced cervical cancer (CC)
patients who have failed to respond to the first-line standard chemotherapy. In April 2020, the first-in-patient dosing
in Turkey was completed in a Phase 3 clinical trial to compare HLX10(PD-1) in combination with chemotherapy
(carboplatin nab-paclitaxel) against chemotherapy (carboplatin nab-paclitaxel) as first-line therapy for locally advanced
or metastatic squamous non-small cell lung cancer (sqNSCLC). In the same month, the first patient dosing in Turkey
was completed in a Phase 3 clinical trial of HLX10(PD-1) or placebo in combination with chemotherapy (Carboplatin-
Etoposide) in previously untreated patients with extensive-stage small cell lung cancer (ES-SCLC). In July 2020, the
first patient dosing in mainland China was completed in a Phase 2 clinical trial of HLX10(PD-1) in combination with
recombinant anti-EGFR humanised monoclonal antibody injection (HLX07) for the treatment of recurrent or metastatic
head and neck squamous cell carcinoma.
8 Shanghai Henlius Biotech, Inc.MANAGEMENT DISCUSSION AND ANALYSIS
The Group has also promoted clinical research on a number of other products in an orderly manner: As of the Latest
Practicable Date, the innovative anti-PD-L1 mAb HLX20 is in the Phase 1 clinical trial in Australia, which is expected
to be combined with other products to develop tumour immunotherapy, and to be widely used in the treatment of
solid tumours. In March 2020, the first patient dosing in Taiwan, China was completed in a Phase 1 clinical trial
of HLX55 monoclonal antibody for injection (“HLX55”) for the treatment of advanced solid tumours refractory to
standard therapy. In March 2020, recombinant humanised anti-EGFR monoclonal antibody injection (“HLX07”) has
demonstrated its good safety and tolerability in a prospective, open-labelled, dose-escalation Phase 1 clinical trial
designed to assess it in the treatment for metastatic or recurrent epithelial tumours refractory to standard therapy, and
the relevant clinical study report has been finished. As of today, the improved innovative anti-EGFR mAb HLX07 is in
the Phase 1b/2 clinical trial process and is expected to be used in the treatment for nasopharyngeal cancer, colorectal
cancer and other solid tumour indications.
3. ACCELERATING THE DEVELOPMENT OF MULTIPLE PRE-CLINICAL RESEARCH PROJECTS
The Group accelerated the development of the pre-clinical research pipeline simultaneously. In January 2020, the
investigational new drug application (IND) of ipilimumab biosimilar HLX13 (recombinant anti-CTLA-4 fully humanised
monoclonal antibody injection) was accepted by the NMPA, whose indications include: (i) unresectable or metastatic
melanoma, (ii) advanced renal cell carcinoma, (iii) microsatellite instability-high or mismatch repair-deficient metastatic
colorectal cancer, and (iv) adjuvant treatment of melanoma. These investigational new drug application (IND) was
approved by the NMPA in April 2020. In January 2020, the investigational new drug application (IND) of Pertuzumab
biosimilar HLX11 (recombinant anti-HER2 domain II humanised monoclonal antibody injection) was approved by
the NMPA, whose indications include metastatic breast cancer and early breast cancer. The product is expected to
be combined with HLX02 or chemotherapy in the adjuvant treatment of HER2-positive breast cancer, neoadjuvant
therapy, and treatment of HER2-positive metastatic breast cancer, and the relevant Phase 1 clinical study completed
the first patient dosing in mainland China in September 2020. In March 2020, the IND of Denosumab biosimilar
HLX14 (recombinant anti-RANKL fully humanised monoclonal antibody injection) was accepted by the NMPA,
whose indication is for postmenopausal osteoporosis in women with high fracture risks. This investigational new drug
application (IND) was approved by the NMPA in May 2020. In May 2020, the investigational new drug application of
anti-Death Receptor 4 (DR4) mAb injection HLX56 for treatment of advanced solid tumours refractory to standard
treatment was approved by the Ministry of Health and Welfare of Taiwan.
During the Reporting Period, leveraging its own abundant technology and resources in the field of antibody drugs, the
Group also actively promoted the cooperative development of fully human antibody drugs for COVID-19. In May 2020,
the Company entered into a cooperation agreement with Sanyou Biopharmaceuticals Co., Ltd. and Shanghai ZJ Bio-
Tech Co., Ltd. in relation to the cooperation to develop fully human antibody drug for COVID-19 for the monotherapy
or combination treatment of COVID-19. With the assistance of the partners, the Company shall be responsible
for the completion of the construction of cell lines and cell banks, pharmacological and pharmacokinetic studies,
pharmacodynamics evaluation, drug prescription and process research, pilot production and inspection, quality
research and safety evaluation of fully human antibody drugs for COVID-19, and the investigational new drug (IND)
application in China and/or other countries and regions based on the IND application strategy and market demand as
agreed by the Company and the partners.
Interim Report 2020 9MANAGEMENT DISCUSSION AND ANALYSIS
The following table demonstrates the product development plans and results of the Group from the beginning of 2020
to the Latest Practicable Date:
Name of product
(reference
drugs/targets) Progress as of the Latest Practicable Date Other recognitions
Commercialised product
HLX01 (漢利康) – In April 2020, addition of 2,000L drug substance
production scale and 2,000L production equipment was
approved by the NMPA
– In April 2020, the addition of 500mg/50ml/vial to the
original specification of 100mg/10ml/vial was approved
by the NMPA
– In July 2020, supplemental applications for two new
indications were approved by the NMPA
HLX02 trastuzumab – In April 2020, Xuhui Facility’s drug substance (DS) and – In March 2020, the Company entered into an
injection (trade name in drug product (DP) line for HLX02 trastuzumab injection exclusive licence agreement with Mabxience,
mainland China: 漢曲 (EU trade name: Zercepac®) passed the GMP inspection granting it the exclusive licence for the
優; EU trade name: by the EU development and commercialisation of HLX02
Zercepac®) – In July 2020, the MAA of HLX02 trastuzumab injection trastuzumab injection for oncology treatment
(EU trade name: Zercepac®) has been officially approved in Argentina, Uruguay and Paraguay
by the European Commission (EC) – In June 2020, the Company entered into the
– In July 2020, Xuhui Facility’s drug substance (DS) Amendment to the License Agreement with
south line and drug product (DP) No. 1 line for HLX02 Accord in respect of HLX02 trastuzumab
trastuzumab injection (trade name in mainland China: injection (EU trade name: Zercepac®). On
漢曲優) passed the on-site inspection conducted by the the basis of the License Agreement entered
Shanghai Medical Products Administration into by both parties for HLX02 trastuzumab
– In August 2020, the NDA of HLX02 trastuzumab injection injection (EU trade name: Zercepac®) in
(trade name in mainland China: 漢曲優) was approved by June 2018, the Amended Agreement is
the NMPA made in respect of the new specifications
and the corresponding milestone payment
arrangement no more than USD3.08 million,
and the adjustment in the royalties of HLX02.
Products with near-term commercial visibility
HLX03 (adalimumab) – In January 2019, NDA of HLX03 (adalimumab) was
accepted by the NMPA and is currently in the priority
review process
– In September 2020, Xuhui Facility has passed the on-
site inspection conducted by Shanghai Medical Products
Administration in respect of HLX03 (adalimumab) drug
substance (DS) south line and drug product (DP) No. 1
line
10 Shanghai Henlius Biotech, Inc.MANAGEMENT DISCUSSION AND ANALYSIS
Name of product
(reference
drugs/targets) Progress as of the Latest Practicable Date Other recognitions
HLX04 (bevacizumab) – In August 2020, Phase 3 clinical trial of HLX04
(bevacizumab) for the metastatic colorectal cancer
indication was completed in mainland China.
– In September 2020, the NDA for HLX04 (bevacizumab)
for the treatment of metastatic colorectal cancer (mCRC)
and advanced, metastatic or recurrent non-small cell lung
cancer was accepted by the NMPA
HLX01 (漢利康) – Phase 3 clinical trial of rheumatoid arthritis indication
completed the enrollment of patients
Products under clinical studies being continuously and efficiently promoted
HLX10 (innovative – Phase 2 clinical trial in progress (chronic hepatitis B;
anti-PD-1 mAb) unresectable or metastatic microsatellite instability-high
or mismatch repair-deficient solid tumours that fails to
respond to the standard therapy)
HLX10+HLX04 – Phase 3 clinical trial in progress (metastatic non-
squamous non-small cell lung cancer)
– Phase 2 clinical trial in progress (advanced hepatocellular
carcinoma)
HLX10+HLX07 – In July 2020, Phase 2 clinical study for the treatment of
recurrent or metastatic head and neck squamous cell
carcinoma (HNSCC) completed the first patient dosing in
mainland China
HLX10+chemotherapy – Five Phase 2/3 clinical trials ongoing (locally advanced/
metastatic esophageal squamous cell carcinoma,
extensive-stage small cell lung cancer, gastric cancer,
locally advanced or metastatic squamous non-small cell
lung cancer, advanced cervical cancer)
HLX55 (innovative – In March 2020, Phase 1 clinical study completed the first
anti-c-MET mAb) patient dosing in Taiwan, China
HLX07 – Phase 1b/2 clinical trial in progress in mainland China – In March 2020, the recombinant humanised
(improved innovative anti-EGFR monoclonal antibody injection
anti-EGFR mAb) (HLX07) has demonstrated its good safety
and tolerability in a prospective, open-labelled,
dose-escalation Phase 1 clinical trial designed
to assess it in the treatment for metastatic
or recurrent epithelial tumours refractory to
standard therapy, and the relevant clinical
study report has been finished.
Interim Report 2020 11MANAGEMENT DISCUSSION AND ANALYSIS
Name of product
(reference
drugs/targets) Progress as of the Latest Practicable Date Other recognitions
Applications for clinical trials of the pre-clinical research project accelerated
HLX13 (ipilimumab) – In April 2020, IND was approved by the NMPA
HLX11 (pertuzumab) – In January 2020, IND was approved by the NMPA
– In September 2020, Phase 1 clinical study completed the
first patient dosing in mainland China
HLX14 (denosumab) – In May 2020, IND was approved by the NMPA
HLX56 (anti-DR4 mAb) – In May 2020, the clinical trial for the treatment of
advanced solid tumours refractory to standard therapy
has been approved by the Ministry of Health and Welfare
of Taiwan
(II) FORWARD-LOOKING PRODUCTION CAPACITY LAYOUT WITH HIGH COST-EFFICIENCY
In order to meet the expected demand for the gradual marketing of candidate drugs in the Group’s product pipelines,
the Group has formulated a phase-based capacity planning for the product development cycle, gradually improved and
enhanced large-scale production capacity based on a sound quality management system, and maintained high quality
standards while expanding production capacity and improving cost-efficiency. Meanwhile, the Group has established
a quality control system that complies with international quality standards, covering the entire life cycle from project
development to material management, product production, quality control, product supply chain management, and product
follow-up after marketing, which lays a solid foundation for the commercialisation in multiple jurisdictions and regions.
As of the end of the Reporting Period, the Group has established Xuhui Facility, a biopharmaceutical production facility in
Shanghai Caohejing Hi-Tech Park, which covers a total area of approximately 11,000 square metres. Xuhui Facility and its
supporting quality management system have passed a number of on-site inspections and/or audits by EU qualified person
and international business partners, which can meet the Group’s short-term production needs. In April 2020, the Group
received two Certificates of GMP Compliance of a Manufacturer from Chief Pharmaceutical Inspectorate, being the hygiene
supervision organization of Poland. The Company’s drug substance (DS) and drug product (DP) line for HLX02 trastuzumab
injection (EU trade name: Zercepac®) at Xuhui Facility passed the GMP certification by the EU. In July 2020, the Group
received the “Notification of the Results of the On-site Inspection of Pharmaceutical Production Base” 《藥品生產現場檢查
(
結果告知書》 ) issued by Shanghai Medical Products Administration, notifying that the drug substance (DS) south line and
drug product (DP) No. 1 line for HLX02 trastuzumab injection (trade name in mainland China: 漢曲優) at Xuhui Facility have
successfully passed the on-site inspection by Shanghai Medical Products Administration. In September 2020, the Group
received the “Notification of the Results of the On-site Inspection of Pharmaceutical Production Base” 《藥品生產現場檢查結
(
果告知書》 ) issued by Shanghai Medical Products Administration, notifying that the drug substance (DS) south line and drug
product (DP) No. 1 line for HLX03 (adalimumab injection) at Xuhui Facility have successfully passed the on-site inspection
by Shanghai Medical Products Administration. As of the Latest Practicable Date, the Xuhui Facility has completed the filing
of production approval for new key equipment of four 2,000L bioreactors to Shanghai Medical Products Administration. The
Group’s overall commercial production capacity has been increased to 20,000L. To further improve the capacity plan, the
Group also commenced the construction of the manufacturing facility at Guangfu Lin Road at Songjian District of Shanghai.
The planned production capacity of the Songjiang First Plant was 24,000L including formulation filling line, which was the
preparation for the Group’s estimated production needs before Songjiang Second Plant was built and put into operation.
Songjiang First Plant has conducted GMP production for clinical samples in the drug substance workshop from May 2020,
and has built four 2,000L bioreactors. During the Reporting Period, in order to promote the development and industrialisation
of continuous flow technology, the Group invested in the construction of continuous production pilot workshop at Songjiang
First Plant, and completed relevant design and procurement of key equipment. In compliance with long-term production
capacity planning, Songjiang Second Plant with a total planning area of 200 mu has also commenced construction in 2019
and is still under construction. As of the Latest Practicable Date, the pile foundation engineering operation of Songjiang
Second Plant Phase 1 project, as well as the structure of the main production building were completed. The subsequent
phases of construction will be gradually commenced in accordance with the Group’s strategies.
12 Shanghai Henlius Biotech, Inc.MANAGEMENT DISCUSSION AND ANALYSIS
(III) ADVANCED COMMERCIALISATION STRATEGY AND LAYOUT
Based on the mission of “to improve patients’ lives by timely providing them with quality and affordable protein
therapeutics through technical innovation and operational excellence”, the Group continues to explore efficient business
operation models with the purpose of improving the accessibility and affordability of biopharmaceuticals, implementing
a commercialisation strategy of “focusing on product portfolio, production capacity and commercial operations, to be the
biomedical leader in China”. The Group’s commercialisation team comprises five major segments: marketing, channel
management, pricing and market access, domestic sales, and strategic planning, with a complete organisational structure
and a clear division of responsibilities. It is expected to effectively promote the Group’s commercialisation and achieve a
stable growth of sales scale.
• COMMERCIALISATION PLANNING FOR HLX01漢利康 (PRODUCTS TREATING HAEMATOLOGICAL TUMOURS)
As the first domestic biosimilar in the strict sense, HLX01漢利康 was successfully approved for marketing in 2019,
which marked the start of exploitation of the domestic biosimilar market. After the launch of HLX01漢利康, Jiangsu
Fosun, a subsidiary of Fosun Pharma (controlling shareholder of the Company) is responsible for the drug’s
commercial sales in mainland China. Jiangsu Fosun has a professional academic promotion team for key hospitals
and a mixed-line sales team for the broader market. All members of two teams passed the technical training and
assessment in related professional fields, with solid medical knowledge and communication skills.
In the first half of 2020, inclusion of HLX01漢利康 into the procurement platform of medical insurance system in each
province of mainland China has progressed smoothly. As of the end of June 2020, 29 out of 30 provinces in mainland
China have approved HLX01漢利康’s inclusion into the medical insurance procurement platform, and 26 provinces
have completed official platform/filed procurement, laying the foundation for subsequent commercial sales of HLX01
漢利康.
From the beginning of 2020 to now, HLX01漢利康 made a significant progress in the aspects of registration and
approval. In April 2020, applications for the addition of 2,000L drug substance production scale and 2,000L production
equipment and new 500mg/50ml/vial specifications were approved by the NMPA. In July 2020, supplemental
applications for two new indications of HLX01 漢利康, including (1) the monotherapy maintenance therapy after
complete or partial response under rituximab in combination with chemotherapy for patients with initially-treated
follicular lymphoma; (2) fludarabine and cyclophosphamide (FC) combination therapy for patients with previously-
untreated or relapsed/refractory chronic lymphocytic leukaemia (CLL), were approved by the NMPA. The Group will
also promote the approval for HLX01漢利康 in treating the rheumatoid arthritis indication. Increased production scale
and production equipment, as well as new specifications and indications, will provide a strong guarantee of HLX01 (漢
利康) production capacity, benefit a wider range of patients, and realise drug usages with more affordable price via
combinations among different scales.
• COMMERCIALISATION PLANNING FOR HLX02 漢曲優 (PRODUCTS TREATING BREAST CANCER AND
GASTRIC CANCER)
Being committed to providing quality and affordable innovative biopharmaceuticals to patients worldwide, the Group’s
products mainly focus on the field of oncology treatment, and this part of the product is planned to be promoted in
mainland China by a self-built commercialisation team of the Group.
HLX02 trastuzumab injection is the core tumour product of the Group. HLX02 漢曲優 is also the first product whose
sales and promotion in mainland China will be led by the Group’s self-built commercialisation team. In order to
successfully conduct the commercialisation of HLX02 漢曲優, the Group has devised a commercialisation strategy
and established a core commercialisation management team. The commercialisation team comprises five major
segments, namely marketing, channel management, pricing and market access, domestic sales and strategic
planning. As of the end of the Reporting Period, the Group has established a commercial team of 310 people for the
Chinese market, of which the core management team is composed of more than 100 experts with extensive industry
experiences. The Group will continue to actively expand the coverage of each segment based on the admission
progress of the product in various regions, and facilitate the construction of the marketing segment in an orderly
manner based on its plans, aiming to cover more than 260 cities in the six major sales regions of the Country.
Interim Report 2020 13MANAGEMENT DISCUSSION AND ANALYSIS
• COMMERCIALISATION PLANNING FOR HLX03 PRODUCTS (PRODUCTS TREATING AUTOIMMUNE DISEASES)
According to the cooperation agreement signed between the Company and Jiangsu Wanbang, a subsidiary of Fosun
Pharma, Jiangsu Wanbang will be responsible for the drug’s commercial sales in China after the product launch of
HLX03, and it has a large-scale professional autoimmune rheumatic business department and a mixed-line sales
team for more markets, which are equipped with professional communication skills and medical knowledge as well
as the experience in successful commercialisation of 優立通 (febuxostat tablets) in the field of rheumatism treatment.
In order to improve the standardised medical services for patients with rheumatism in mainland China, an online
management system for patients with rheumatism was set up on the internet hospital of Jiangsu Wanbang Cloud
Health Technology Co., Ltd.* (江蘇萬邦雲健康科技有限公司) (a subsidiary of Jiangsu Wanbang) in the first half of
2020. Meanwhile, to coordinate the launch of HLX03 products, the sales team of Jiangsu Fosun has also further
optimised and improved the dedicated sales team’s level of professionalism.
(IV) RESULTS OF INTERNATIONALISED LAYOUT
Based on the internationalised positioning set at the Group’s establishment and the long-term internationalisation strategy,
the Group actively implements a comprehensive internationalised R&D and operation strategies, and promotes the smooth
development of commercialisation of products in the international market. With the feature of “global linkage, integrated
innovation” as the product development concept, the Group possesses R&D laboratories in China Shanghai, China Taipei,
and USA California, and the three R&D centres collaborate closely to ensure highly productive and cost-effective R&D
processes to jointly create a diverse and complete technology platform and strong independent R&D capabilities, laying a
solid foundation for the Group’s internationalisation strategy and entering the international market.
At the same time, the Group is proactively carrying out its global commercialisation layout. Prior to the products to
be approved for marketing, it has reached strategic commercialisation cooperation with some of the world’s leading
pharmaceutical companies in order to rapidly occupy the global market share through the partners’ existing capabilities and
resources. As of the Latest Practicable Date, the Group has signed commercial cooperation agreements with international
pharmaceutical companies such as Accord, Cipla Limited, Biosidus S.A., Jacobson Medical (Hong Kong) Limited, KG
Bio, Farma De Colombia and Mabxience in respect of a number of core products of the Company, with many foreign
authorisations covering more than 90 countries and regions worldwide. In March 2020, the Company entered into an
exclusive license agreement with Mabxience to grant it an exclusive license for the development and commercialisation
of HLX02 products for oncology treatment in Argentina, Uruguay and Paraguay, and the Company will receive an upfront
payment of USD250,000 and milestone payments not exceeding USD500,000. In June 2020, the Company entered into
amendments to the License Agreement with Accord in respect of HLX02 (trastuzumab injection) on the basis of the License
Agreement in relation to HLX02 (trastuzumab injection) entered into by both parties in June 2018, making decisions on the
new specifications for HLX02 and the corresponding milestone payment arrangements not exceeding USD3.08 million,
royalty adjustments (increase from 13.5%-25% of profits of net sales as agreed in the original license agreement to 15%-
26.5%), etc.
In April 2020, the Group’s drug substance (DS) line and drug product (DP) line for HLX02 trastuzumab injection (EU trade
name: Zercepac®) at Xuhui Facility passed the Good Manufacturing Practice (GMP) certification by the EU. In July 2020,
the Marketing Authorisation Application (MAA) for HLX02 trastuzumab injection (EU trade name: Zercepac®) applied by the
Group and its business partner Accord was duly approved by the European Commission (EC), making HLX02 (trastuzumab
injection) the first biosimilar made by Chinese institution which has been approved for launching in the EU.
WARNING STATEMENT WITH REFERENCE TO THE REQUIREMENTS UNDER RULE 18A.05 OF THE RULES
GOVERNING THE LISTING OF SECURITIES ON THE STOCK EXCHANGE OF HONG KONG LIMITED: WE MAY NOT
BE ABLE TO ULTIMATELY DEVELOP AND MARKET OUR CORE PRODUCTS.
14 Shanghai Henlius Biotech, Inc.MANAGEMENT DISCUSSION AND ANALYSIS
II. BUSINESS OUTLOOK FOR THE SECOND HALF OF THE YEAR
In 2020, the Group will further expand its biopharmaceutical product portfolio covering oncology, auto-immune diseases and more
fields, capitalise the achieved first-entrant advantages to further advance the implementation of the Group’s internationalisation
strategy, improve the production base construction, expand production capacity and accelerate the commercialisation of more
high-quality biological products to benefit more patients worldwide.
(I) CAPITALISE ON FIRST-ENTRANT ADVANTAGES AND ACCELERATE THE LAUNCH OF COMMERCIAL
SALES
As one of the leading domestic biopharmaceutical companies, the Group actively responds to national calls and complies
with national pharmaceutical reforms to provide patients with high-quality and affordable biopharmaceuticals. Meanwhile,
the Group has clearly established a comprehensive and efficient business operation model in five major segments including
marketing, channel management, pricing and market access, domestic sales and strategic planning with patient-centric, and
continue to promote the successful commercialisation of more products, so as to improve the accessibility and affordability
of biopharmaceuticals. Given the low development risk and identified market potential of biosimilars, the Group will continue
to accelerate the domestic commercialisation of multiple biosimilar products in the pipeline. HLX02 trastuzumab injection
(trade name in mainland China: 漢曲優) was approved for launching by the NMPA in August 2020. HLX03 is expected to be
approved for launching in the second half of 2020 or the first half of 2021 and to become the main driving factor other than
HLX01漢利康 and HLX02 trastuzumab injection (EU trade name: Zercepac®) for the Group’s short-term revenue growth.
HLX02 trastuzumab injection (trade name in mainland China: 漢曲優) is the core tumour product whose sales promotion
in mainland China will be led by the Group’s self-built commercialisation team. In order to successfully commercialise it in
China, the Group will continue to strengthen market access capacity-building, promote the rapid landing of national health
insurance, and will plan to cover about 1,500 hospitals at all levels nationwide in the second half of 2020. In the second
half of 2020, the Group also plans to actively cooperate with relevant corporations in fields such as medical big data, HER2
testing, innovative payment, and patient education to build a treatment ecosystem for HER2-positive patients. Nonetheless,
the Group will actively explore the huge potential of the county market in the PRC and gradually realise the grand vision of
“not leaving a HER2-positive patient behind”.
In the second half of 2020, the Group will continue to strengthen the sales landing of HLX01 漢利康, capitalise the first-
entrant advantages, and maintain close work with Jiangsu Fosun to focus on the continued growth of HLX01 漢利
康 in the field of haematological tumours. With the releasing production capacity resulting from the approval of 2,000L
production scale, and the successful approval of two new indications of HLX01 漢利康, it is expected to promote the
continuous growth of the sales scale of HLX01 漢利康 and the gradual reduction of production costs, further enhancing
its market competitiveness. Meanwhile, the Group will continue its cooperation with Jiangsu Wanbang to carry out
preparation for sales of HLX03, and make full use of Jiangsu Wanbang’s successful commercialisation experience in the
field of rheumatology treatment product 優立通 (febuxostat tablets) to further improve the online management system for
patients with rheumatism, build an Internet platform “Youxue Hospital” (優學醫院), and manage those patients in advance,
implementing the concept construction before the product launch, and fully preparing for the future commercialisation of
HLX03.
Interim Report 2020 15MANAGEMENT DISCUSSION AND ANALYSIS
(II) MAINTAIN HIGH-QUALITY STANDARDS AND EFFICIENTLY PLAN PRODUCTION CAPACITY
CONSTRUCTION AND UTILISATION
The Group will further improve the production system construction in accordance with the product R&D and launching
plan, complete the production base construction and increase production capacity to provide strong guarantees for
the successive commercial sales of products while achieving efficient utilisation of production capacity. The Group’s
Xuhui Facility plans to continually improve production efficiency through a series of lean management and process
optimisation initiatives to reduce production costs. At the same time, the Group will continue to focus on the development
and industrialisation of continuous flow technology in the second half of the year, with a view to ensure productivity and
quality in large-scale commercial production of future products. In 2019, the Group has started construction of Songjian
First Plant to prepare for the estimated capacity demand before the Songjiang Second Plant was put into operation. The
planned production capacity of the Songjiang First Plant was 24,000L, including formulation filling line. The drug substance
workshop has started the GMP production of clinical samples since May 2020, and is expected to complete validation of
commercial production during 2020. In order to achieve long-term capacity planning, the Group will continue to promote
construction of the Songjiang Second Plant for enhancing the overall production capacity of the Group. The structure of
the Songjiang Second Plant Phase 1 project main production building is completed and will be put into trial production
and conduct related verification work in 2021. Upon completion of construction, the Songjiang Second Plant will become
the Group’s base for R&D, pilot production and production of mAb biopharmaceutical drugs. This will further enhance the
Group’s market competitiveness in core business area, and satisfy the commercialised production demand for biosimilar
and bio-innovative drugs of the Group.
(III) ACTIVELY PROMOTE R&D OF INNOVATIVE DRUGS BASED ON OUR EXTENSIVE PIPELINE
The Group will fully utilise the globally integrated independent development platform, keep up with the international trend,
continue to expand and enrich the product target layout, optimise the development platform of bi-specific antibodies, and
create a high-quality and affordable innovative product pipeline. In the second half of 2020, the Group will actively carry
out and promote the development of innovative drugs based on the existing extensive product pipelines and mature R&D
platforms. NDAs for the Group’s self-developed core product innovative drug HLX10 (PD-1) are planned to be submitted
to the NMPA in 2021. Meanwhile, clinical trials of combined immunotherapy of tumours with HLX10 (PD-1) as the core,
for indications such as recurrent or metastatic HNSCC and metastatic colorectal cancer, are also planned to be further
advanced in the second half of 2020.
While rapidly advancing the progress of clinical trials of candidate drugs in the pipeline, the Group will also continue
to effectively and efficiently promote the preclinical R&D process of products under development, and accelerate the
deployment of HLX26 innovative anti-LAG3 mAb, HLX23 innovative anti-CD73 mAb, HLX15 daratumumab biosimilar and
other products in the global registration and approval of multiple products, and then carry out clinical research programs.
At present, the Group’s mAb product pipeline has extensively covered tumour-specific targets (such as EGFR, HER2 and
c-Met), anti-angiogenesis targets (such as VEGF and VEGFR2) and tumour immunotherapeutic targets (such as PD-1,
PD-L1, CTLA-4, LAG3, TIGIT and CD73) and during the development, the Group has accumulated a wealth of research
data and practical experience on the target biological pathways and antibody interactions as well as the relationship
between antibody structure and pharmacodynamics. Synthesising such data and experience, and relying on the Group’s
comprehensive bi-specific antibody development platform, newly optimised phage library of humanised monoclonal
antibody and strong clinical trial advancing capabilities, it is expected to make important breakthroughs in the R&D of bi-
specific antibodies containing PD-1, PD-L1, EGFR and HER2 targets.
16 Shanghai Henlius Biotech, Inc.You can also read
